The Eclectic Economist

The Eclectic Economist

The tale of Uber and a 19th-century French economist

Bastiat would understand would Uber is going through in Paris. Reuters

The French government and French taxi drivers are furious with Uber, the US car-hailing company.

At the end of June, the government arrested two top executives of the French division of Uber and is planning to bring them to trial. That came a few days after taxi drivers staged violent protests in Paris, burning cars and attacking other drivers who they thought worked for Uber.

The protests clearly worked since Uber suspended its lower-cost UberPop until the French Constitutional Court determines later this month whether the service is legal under French law.

The Uber situation reminds us of French economist Frédéric Bastiat, who, while famous in his day, is relatively unknown now.

Frédéric Bastiat (1801-1850) Wikimedia

Bastiat was born in 1801 in the Southern French town of Bayonne and worked in his family’s export business before becoming an elected official in his early 30s. His business experience informed the economic ideas that he promulgated in a number of polemical essays published in the 1840s.

Unfortunately, on one of his speaking tours in France, he contracted tuberculosis. He then retreated to Rome to recuperate, but died there in 1850.

Bastiat’s life proves that change is possible, even in middle age. It was only in 1844, at the age of 43 that he published his first economics article in Journal des Économistes. He would write for them regularly until his death.

This late-stage career change provided him with worldwide recognition that he would never have attained had he remained an exporter and politician from Southern France. It also gave him a perch from which to satirize economic short-sightedness.

Bastiat and Uber

Bastiat’s most famous short essay (read it in English here or French here) effectively satirizes the entire Uber situation, in spite of the fact that he was born 200 years before Uber’s founding and knew nothing about car sharing, apps or smart phones. Nonetheless, his analysis of small business owners, such as today’s taxi drivers, is as relevant in 2015 as when he wrote the article in 1845.

Bastiat’s essay is penned as a petition from French candle makers to the French Parliament. The petition asks the government to “pass a law requiring the closing of all windows, dormers, skylights, inside and outside shutters, curtains, casements, bull’s-eyes, deadlights and blinds — in short, all openings, holes, chinks, and fissures through which the light of the sun is wont to enter houses.”

The ostensible goal of the candle makers is to demonstrate the ruinous effects of a “foreign competitor” (ie, the sun) on the French economy, since the sun provides light at little or no cost. Through the candle makers’ petition, Bastiat shows — with tongue embedded deeply in cheek — that by forcing people in France to rely solely on candles for illumination, a variety of ancillary French enterprises, such as farming, shipping and mining, would also greatly prosper.

He uses humor to poke fun at social conditions, much like other great satirists, such as the Irishman Jonathan Swift in A Modest Proposal, who suggested that cooking babies was a wonderful way to simultaneously feed people and reduce over-population.

What makes Bastiat’s satire so brilliant is that he exposes the illogic of protecting the candle industry by treating the sun as if it were a foreign adversary with unfair competitive advantages. His belief in the 19th-century concept of economic freedom and his opposition to protectionism actually made him a favorite of such 20th-century world leaders as Ronald Reagan and Margaret Thatcher.

As for the relevance of the essay, by replacing the sunlight with Uber and candle makers with taxi drivers, one can see the same economic short-sightedness in 2015 as in 1845. This satirical work is just 1,600 words long, but it – among many by Bastiat – is well worth reading now as French justice ponders UberPop’s fate and the direction of the entire French economy.

Andy Koppel, who received a PhD in French Literature from Tufts University, co-authored this article. He was vice president of technical marketing and OEM relations at North Atlantic Publishing Systems and has spent his working life helping to move the printing and publishing industry into the high-tech era. He has no affiliations, investments or connections to any car-sharing services.